September 25, 2002
The Honorable Jeffrey R. Holmstead
Assistant Administrator for Air and Radiation
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C. 20460
Re: General Provisions and Clean Air Act Sections 112(g) and
112 (j); Comments on Proposed Settlement with the Sierra
Club; 67 Fed. Reg. 54804 (August 26, 2002).
Dear Assistant Administrator Holmstead:
The Office of Advocacy of the U.S. Small Business
Administration was established by Congress in 1976 pursuant
to Pub. L. 94-305 to represent the views and interests of
small businesses in Federal policymaking activities. The
Chief Counsel, who oversees the Office of Advocacy,
participates in agency regulatory actions when he deems it
necessary to ensure proper representation of small business
interests.
As you know, we have been monitoring and working closely
with the U.S. Environmental Protection Agency's ("EPA")
Office of Air Quality Planning and Standards and with many
small business representatives regarding the development of
the remaining National Emission Standards for Hazardous Air
Pollutants ("NESHAPs") under section 112 of the Clean Air
Act ("Act" or "CAA"). These NESHAPs are to be based on the
application of air pollution reduction measures known as
"maximum achievable control technology" ("MACT"). We are
writing to oppose EPA's proposed settlement with the Sierra
Club that would shorten the time available for facilities to
file their applications by modifying the current section 112
rules.
Due to limited resources, EPA was unable to promulgate
numerous MACT standards by the May 15, 2002 deadline. Under
EPA's previously existing rules, section 112(j) of the Act
would have imposed extremely burdensome requirements on
states, industry, and EPA due to a failure to meet this
"hammer" deadline. However, EPA promulgated a revised final
rule governing the General Provisions and CAA sections
112(g) and (j), which bifurcated the permit application
procedure to give EPA 24 months to promulgate the remaining
MACT standards and the states and industry enough time to
prepare for the standards. By allowing the additional time,
EPA eliminated the need for unnecessary and extremely
burdensome case-by-case determinations.
The Office of Advocacy is concerned with the provision in
the settlement that shortens the time between the Part 1
application and the Part 2 application from 24 months to 12
months.(1) This action would force an estimated 80,000
facilities (based upon the already filed Part 1
applications), many of which are small businesses, to
complete the burdensome, needless, and counterproductive
Part 2 applications. These complex applications require
expertise far beyond the technical and economic capabilities
of small firms. This will be particularly so in light of
the accelerated timeframe imposed by the proposed
settlement. The Part 2 applications could cost each of the
80,000 affected facilities anywhere from $10,000 - $50,000
or more if they need to prepare case-by-case MACT permit
applications, with an aggregate cost to industry in the
billions of dollars. Such an impact far surpasses the $100
million dollar threshold for rules subject to review by the
Office of Management and Budget under Executive Order 12866.
We also surmise that such a proposal would have a
significant economic impact on a substantial number of small
businesses, thus triggering the requirement to convene a
Small Business Advocacy Review Panel under the Small
Business Regulatory Enforcement Fairness Act of 1996.
We are further concerned with the adverse impacts on the
financially strapped state agencies who must complete the
"case-by-case" MACT determinations. State permitting
agencies will be unable to handle this avalanche of case-by-
case permit applications and resulting MACT determinations.
Since EPA likely will issue proposed (if not final) national
MACT standards well before such potentially divergent case-
by-case proceedings could be completed by the states, these
massive government and business expenditures are completely
unnecessary. Therefore, EPA should not accept the
settlement agreement and should return to the final rule
granting facilities 24 months between the Part 1 and Part 2
applications. Absent this, provisions must be made in any
proposed or final rule to ameliorate this enormous burden
that EPA would impose on industry and states, or EPA must
comply with SBREFA and convene a Federal panel for this
rulemaking.
We appreciate your attention to this matter and look forward
to working with EPA and interested parties in resolving this
matter. You can reach me or Kevin Bromberg of my staff at
202-205-6533 or kevin.bromberg@sba.gov.
Sincerely,
Thomas M. Sullivan
Chief Counsel for Advocacy
Kevin Bromberg
Assistant Chief Counsel for Environmental Policy
cc: John Graham, Administrator, Office of Information and
Regulatory Affairs,
Office of Management and Budget
Tom Gibson, Assistant Administrator, Office of Policy,
Economics and Innovation,
Environmental Protection Agency
Robert Fabricant, General Counsel, Environmental
Protection Agency
ENDNOTE
1. The Office of Advocacy had asked EPA to allow between 18
and 24 months in our letter dated February 5, 2002 to
Governor Whitman. Advocacy was pleased by EPA's adoption of
the 24 month time period in its final rule.